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Hulu’s voodoo: Optimized online video ads lead to double the revenue in 2010

Hulu has finally shed light on how much money it's bringing in. At the
NewTeeVee Live event, CEO Jason Kilar said Hulu would close out 2010
with over $240 million in revenue. That’s double the $108 million it
made last year, and a nice benchmark for comparison to online video
platforms across the board.

It’s very strong growth, particularly when gauged against the overall
US online video ad market. eMarketer predicts advertisers
will spend roughly $1.5 billion on online video ads in 2010. Hulu’s $240
million equates to a roughly 16% share of that market. So how has the
company attracted so much demand?

Reach, reach, reachQuestions about the accuracy of TV ratings in this age of time-shifting and multi-screen viewing abound, but advertisers are still spending billions on TV. Why? Because TV delivers reach.

Hulu, with its over 29 million unique monthly visitors (per comScore), reaches nearly 10% of the US online audience with its ads overall. That’s the kind of reach that makes big brands (with big budgets) salivate, and makes media buyers’ lives far easier.

Brand-friendly environment

But reach alone doesn’t satisfy advertisers. “Premium” brands want to be sure their ads are running in a “premium” environment (cough: not YouTube, yet). Hulu built its own brand as being the go-to place for network TV on the web from the start, and that strategy is paying off.

A user-friendly interface, combined with the ability to make sure their ads were running against targeted, high-quality content, continues to attract big brands like McDonald’s, Johnson & Johnson, and Target.

Constant innovation

Hulu also offers a variety of ad units, and continues to test new formats to ensure that advertisers get results. Some options include standard :15 and :30 second spots, overlay logos, and bugs that prompt users to watch a full video.

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